Starbucks acquires Teavana for $620M

[10scoachrick]

Originally Posted by ATL Golfer

People have lots of choices for their coffee.

People have lots of choices of places to hang out.

Also, this is not a done deal.

Very true...also, hard to make money on 'hanging out'. Maybe it's too early in the day, but I'm having some trouble with the numbers. $620 million on $42 million in sales with a $1.2 million 'loss' last year...and this:

" Teavana is a cheap buy for Starbucks, which is sitting on $1.5 billion in cash. Teavana, who’s stock has taken a hot in the past six months, has a market cap of about $380 million."


I don't drink coffee; but I make it every day for My Darling. I 'may' need a cup or two in order to figure this out.


Maybe with suffix names like "-vana" and "-topia", they're putting something 'extra' in the tea!

[10scoachrick]

"Rutt-row"...the plot thickens:

Teavana denies Glaucus? claims of pesticides in teas - Atlanta Business Chronicle


From the article:Teavana Holdings Inc. issued a statement Tuesday refuting allegations by short-seller Glaucus Research Group that the Atlanta-based tea retailer’s products are tainted by pesticides.
Starbucks Corp. (NASDAQ: SBUX) announced Nov. 14 its plans to buy Teavana (NYSE: TEA) for $620 million in cash.
Glaucus has a short position in Teavana. In a note to investors, it claims it commissioned independent tests of Teavana’s products and found some alarming data.

[arjay57]

Originally Posted by ATL Golfer

People have lots of choices for their coffee.

People have lots of choices of places to hang out.

There are certainly a million places to buy coffee but other than coffee shops I can't think of that many places where you buy coffee and hang out.

Personally I don't do that -- I generally prefer to get my coffee and move on. However, there are occasions when I want to sit down and peruse the paper, chat with a friend and people watch for 20 minutes or so.

If I had a coffee shop I'd limit people to 30 minutes of hanging out per cup. It's ridiculous for somebody to buy one drink and camp out for hours on end using your wifi and electricity and taking up space. How obnoxious.

[samiwas1]

Originally Posted by 10scoachrick

Very true...also, hard to make money on 'hanging out'. Maybe it's too early in the day, but I'm having some trouble with the numbers. $620 million on $42 million in sales with a $1.2 million 'loss' last year...and this:

" Teavana is a cheap buy for Starbucks, which is sitting on $1.5 billion in cash. Teavana, who’s stock has taken a hot in the past six months, has a market cap of about $380 million."


I don't drink coffee; but I make it every day for My Darling. I 'may' need a cup or two in order to figure this out.


Maybe with suffix names like "-vana" and "-topia", they're putting something 'extra' in the tea!

It is very odd. Also, Teavana went public last year and their stock has pretty much been on a general downward trend. They were at 36% of their IPO value when the Starbucks deal was announced. Odd.

[FromGA]

Originally Posted by samiwas1

It is very odd. Also, Teavana went public last year and their stock has pretty much been on a general downward trend. They were at 36% of their IPO value when the Starbucks deal was announced. Odd.

I heard Urvesh Karkaria (Atl Business Chronicle) on radio, and he seemed to describe this as a sign of Teavana weakness. Low stock price, and Starbucks took the leap, fending off a potential rival to its Tazo brand, and expanding into the tea business at the same time.

He said Atlanta would be losing a headquarters as part of this, and lose jobs as well. He said he first got wind of this from the job situation of his sources.

So I think this might be a great entrepreneurship story for Atlanta, but not necessarily a positive story in the present.

[Annuvin]

Originally Posted by ja1myn

Starbucks probably knows their coffee tastes like absolute crap so they're trying to move into the tea industry.

Oh Lord...

Pretty good success story for coffee that tastes like "absolute crap".

Go back to drinking Timmy Ho's dishwater and leave the real coffee to those of us with taste.

[ja1myn]

Originally Posted by Annuvin

Oh Lord...

Pretty good success story for coffee that tastes like "absolute crap".

Go back to drinking Timmy Ho's dishwater and leave the real coffee to those of us with taste.

I wasn't hating on the success, I was hating on the coffee.

[Somoso]

My view is that Starbucks is popular because its more of a social experience as opposed to a coffee experience. Also recall that the rise of coffee shops began long ago when states normalized the legal drinking age to 21. Prior to that states had various ages - 18,19,21. The normalization led to a gap in social places for the 18-21 demographic and, more generally, for those who didn't drink. At this point none of this matters as Starbucks is ubiquitous and represents a default for many seeking a beverage even though their coffee isn't that good (your opinion may vary).

I travel extensively as part of my jobs and Starbucks, no matter where you go, is one of the biggest meet-markets I've ever seen. It rivals any singles bar I've ever been in. Sure its more low key and the pickup lines are a bit more clever (well not by much) but it is a better alibi. I have lots of married friends who met their future spouse in such coffee shops.

[dichloromethane]

Meeting someone in a coffee shop? That sounds like some sort of bad romantic comedy.

I think with Starbucks's marketing, Teavana might be able to become more successful. The question is should Starbucks shutter Teavana and put up starbucks joints in their place and just start selling tea? Or should Teavana keep it's name?

There are certain aspects about Teavana that prevent Starbucks from just "starting to sell tea." The free samples are what lure people in. The kids always have to stop by for their free tea sample whenever we're at the mall. I'm not big on tea myself, but that stuff isn't bad.

They also sell plenty of tea equipment that adds to the experience. The ability for you to "choose" your tea by the way they waft the smell of the tea is also a fun and quirky experience.